Every business owner needs some form of insurance. Think of insurance policies as safety nets that you can land on if you slip off the business ladder. There’s a lot that can go wrong when running your company and the recovery could cost you a fortune. Everything from theft to a lawsuit is a possibility that you may need to consider. With the right insurance policy in place, you can soften the blow of any financial issue.
You also need to understand that some forms of insurance are not optional. Small businesses are legally required to have certain insurance policies in place to protect the business, their employees, and the general public. Here are some of the insurance policies that you need to have in place before your new company opens on the market.
General liability protects you if your business injures another individual or causes damage to property. With general liability, you can make sure you are covered with a defense and if you need to pay damages. As such, it is crucial for any and all business owners, whether working from home, a factory or in an office. There are lots of instances where general liability insurance could come into play. For instance, a member of the general public might be injured on your property due to tripping over a wire in your office. If this occurs, the insurance may help you pay for any legal costs or compensation.
Excluding Texas, all states require business owners to have workers compensation insurance in place if they have more than five employees. This form of insurance provides compensation to workers who are injured on the job, at work, usually on the property. In some states, it is possible for workers to claim on injuries that they suffered from while away from the business property within business hours. The insurance can be used for anything from paying medical bills to covering lost wages. By having worker’s compensation, business owners can avoid the possibility of injured employees suing for damages due to an injury. Penalties for not having the right workers compensation in place are costly and should be avoided.
Any business that offers services to clients or customers will need to consider getting professional liability insurance. This protects a company in the event of errors or negligence while offering a service. For instance, doctors have this insurance to in case they are sued for malpractice. It is useful for a wide range of companies from hair salons to law firms.
Product liability relates specifically to products being sold by your business. If you sell products, this will protect you if the product in question is argued to be defective or causes injury to customers. For instance, in the past, there have been toy firms that have been sued for using lead paint on their products. With product liability, these firms were able to avoid expensive legal costs.
Business owners often hold a lot of sensitive data about clients and customers. Usually, if a hack does occur in your business, customers will be the targets rather than your company. As such, it is important to protect yourself from the cost of losing sensitive data. With data breach insurance you will be covered for any legal damages related to this issue. It is important to realize that this insurance protects a business whether the data was lost electronically or through a paper file.
Property insurance will protect your business from any damage to your property or any items inside it. For instance, it ensures that you are covered if computer hardware is stolen from your office. Or, if a fire destroys part of your building. It is also possible to increase the insurance policy to ensure that loss of earnings are protected if your business is not able to function due to the damage that has occurred.
Commercial Auto Insurance
You might want to think about personal automobile insurance if you are using a fleet of vehicles for your company. This is going to be particularly important for any business that has transportation as a major part of their business model. For instance, a logistics business owner should make this insurance a top priority. It protects you from bodily injury, physical damage and liability in the event of an accident on the road involving a car your company owns.
If you are running your business from home, homeowner’s insurance is going to come into play. This will protect you from the loss or damage of any property in your home. It can also ensure that you are covered if any injury occurs in your home or an accident that you may have caused.
Renters insurance is specifically for business owners who are renting their home or their property. Similar to homeowner’s insurance it protects the renter in the event or property damage, a personal injury or damage to the property itself.
It’s possible that your business is going to have the potential to make you a lot of money in the future. If you passed away, you would want to make sure that your loved ones still benefited from the potential earnings of your company. With a life insurance policy, the insurance company pays out a certain amount of money to your beneficiaries. This amount is based on how much you would have expected to make if you had lived a full life. As such, it can give new business owners peace of mind and guarantee that the potential for their business earnings are protected.
Personal Umbrella Insurance
Finally, you should consider looking into personal umbrella insurance. This gives you an extra level of protection from legal claims, property damage and any other financial loss that you might incur. Often, this form of insurance is sought out when all other forms of coverage have been used. As such, it is commonly used by larger corporates and bigger businesses. You probably won’t need it straight out of the gate.